Turn Your Home Equity Into an Investment Property

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If your property has gone up in value or you’ve paid off a chunk of your mortgage, you could be sitting on a powerful tool to grow your wealth — your home equity.

Using equity to buy an investment property is a strategy many Australians use to build long-term financial security. But while it can help fast-track your goals, it’s important to understand both the benefits and the risks.

Here’s a simple breakdown of how it works, and how to decide if it’s the right move for you.

What is Equity (and Usable Equity)?

Equity is the difference between your property’s current market value and what you still owe on your loan.

📌 For example:
If your home is worth $1,000,000 and your loan balance is $200,000, you have $800,000 in equity.

But not all of that is immediately available.
Most lenders will allow you to access up to 80% of your property’s value, minus what you owe. This is your usable equity.

Example:

  • 80% of $1,000,000 = $800,000

  • Minus $200,000 loan = $600,000 in usable equity

In some cases, you can borrow above 80% if you’re willing to pay Lenders’ Mortgage Insurance (LMI).

Why Use Equity to Buy an Investment Property?

Here are the pros and cons:

✅ Pros:

  • No deposit needed: Use equity instead of saving up again.

  • Tax benefits: Claimable expenses like interest, management fees, and repairs.

  • Grow your portfolio: Capital growth and rental income from multiple properties.

  • Bigger borrowing power: Lenders may approve more based on your equity.

⚠️ Cons:

  • Higher debt: You’ll need to repay more, possibly with higher repayments.

  • Market risks: If property values fall, your equity could shrink.

  • Tax implications: Capital Gains Tax (CGT) may apply when selling your investment.

4 Ways to Use Equity to Buy an Investment Property

  1. Refinance to access equity
    Take out a new loan that replaces your current one, with extra funds released as equity — ready to be used as a deposit.

  2. Home loan top-up
    Increase your existing home loan to access extra funds for your investment property deposit.

  3. Cross-collateralisation
    Use your current property as security for both the home loan and the new investment loan. It ties your properties together financially — which can have pros and cons.

  4. Line of credit
    Set up a flexible line of credit using your equity. You only pay interest on the amount you use.

Need Guidance? Let’s Talk

Using your home equity can be a smart strategy — but it’s not one-size-fits-all. The right structure and loan setup can make all the difference.

👉 Want to find out how much equity you have — and what you can do with it?
Give us a call or book a chat. We’ll help you understand your options and create a plan that fits your goals.

Lets chat – Call Us On 02 8014 7771 or send an enquiry here

Removing a Guarantor

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Guarantor Loans – Frequently Asked Questions

 

1. What is a guarantor?

A guarantor is usually a close family member who offers part of their property’s equity as extra security for your home loan.
This can help the borrower:

  • Buy sooner with a smaller deposit

  • Avoid costly Lenders Mortgage Insurance (LMI)

  • Potentially access lower interest rates

  • Keep more of their savings for renovations, emergencies, or other investments

2. Who can be a guarantor?

Most lenders only accept immediate family members — such as parents, siblings, or sometimes grandparents.

3. How does it work?

The guarantor’s property is used as additional security for the borrower’s loan.
This reduces the lender’s risk, meaning the borrower may be able to borrow up to 100% (or more to cover costs) without paying LMI.

4. Is it a limited guarantee?

Yes. Most guarantor loans in Australia are limited guarantees, meaning the guarantor is only responsible for a set portion of the loan, not the whole amount.

Example:

  • Purchase price: $1,000,000

  • Stamp duty & buying costs: $45,000

  • Main loan: 80% of purchase price = $800,000

  • Guarantee amount: $1,045,000 − $800,000 = $245,000

The guarantor’s property is used to secure that $245,000 portion, but the borrower makes all the repayments.

5. Does the guarantor have to pay anything?

No. The guarantor doesn’t give the borrower money — they provide a legal promise backed by their property’s equity.
However, if the borrower can’t repay the loan, the lender can recover the guaranteed amount from the guarantor.

6. What are the risks?

If the borrower defaults:

  • The guarantor could be asked to repay the guaranteed amount

  • The guarantor’s property could be at risk if repayment isn’t made
    That’s why independent legal and financial advice is mandatory.

7. How is a guarantor removed?

A guarantor can be released once the borrower has at least 20% equity in their property — from:

  • Loan repayments

  • Property value growth

  • Cash lump sum repayments

  • Or a combination of the above

The process:

  1. Lender orders a property valuation

  2. Borrower completes a guarantor release/discharge form

  3. Guarantor’s property is removed from the loan

Example:

  • Purchase: $600,000 | Loan: $540,000 (90% LVR)

  • After 4 years: Loan = $510,000, Value = $640,000

  • New LVR = 79.7% → Guarantor is released

8. Can someone be a guarantor for more than one loan?

Yes, but lenders will check their total financial commitments before approving.

9. What if the property value drops?

If equity falls below 20%, the guarantor may need to remain on the loan until the equity improves.

10. Does the guarantor have to be working?

Not necessarily. Retirees or non-working guarantors may be accepted if they have enough equity and understand the risks.
All guarantors must get independent legal advice before the loan is finalised.

End-of-Financial-Year Checklist: Is Your Home Loan Still the Right Fit?

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As June 30 approaches, it’s the perfect time to take stock of your finances — and your home loan should be top of the list. Whether you’re a homeowner or an investor, reviewing your mortgage every couple of years helps ensure it’s still serving your goals — not draining your bank account.

Rates change, your life evolves, and new, better products come onto the market. What suited you five years ago might not be your best option today. Here’s how to check if your loan is still working for you this EOFY.

Quick Home Loan Health Check

Many homeowners stick with the same loan for years, without checking if it’s still competitive or flexible. Here are five questions to ask yourself before 30 June:

  1. Am I paying for features I don’t use?
     Offset account, redraw, package fees — if you’re not using them, you’re wasting money.
  2. Has my situation changed?
     Changes in your income, work, family, or spending might mean your loan structure should change too.
  3. Could my property be worth more now?
     A new valuation could reveal equity to renovate, invest, or reduce debt.
  4. Am I happy with my lender’s service?
     If you’re frustrated by poor service or slow responses, it may be time to switch.
  5. Am I paying unnecessary fees or missing out on flexible features?
     Check for exit fees, redraw restrictions, or limits on extra repayments.

If these questions raise concerns — or you simply want peace of mind — let’s talk. I can compare rates and lenders for you, saving you time and money.

EOFY Checklist for Property Investors

If you own investment property, tax time is your chance to get organised and maximise deductions. Here’s what to tick off:

✔️ Claim all eligible deductions
 Interest on loans, borrowing expenses, repairs, body corporate fees, and property management costs can all be deductible.

✔️ Split expenses correctly
 If your property isn’t rented full-time (like Airbnb), you’ll need to apportion expenses accurately.

✔️ Pre-pay some costs
 Pre-paying insurance or loan interest can bring deductions into this tax year if you expect higher income now.

✔️ Document everything
 Keep thorough records of rent income and expenses. Cloud record-keeping tools can help.

✔️ Write off bad debts
 Unpaid rent may be a claimable bad debt — check with your accountant.

✔️ Check capital gains obligations
 If you sold a property this year, plan for CGT and see if you’re eligible for the 50% discount.

✔️ Use depreciation deductions
 A quantity surveyor can help you claim building and asset depreciation — a valuable way to reduce tax.

✔️ Review your portfolio’s performance
 Compare rental returns, occupancy, and costs. Decide whether it’s time to renovate, refinance, or buy again.

✔️ Get a loan health check
 With recent rate changes, it pays to check if your investment loan is still competitive and structured for tax effectiveness.

Let’s Set You Up for a Strong New Financial Year

Tax time is the perfect opportunity to refresh your finances and make sure you’re not paying more than you need to.

If you’d like help reviewing your loan, unlocking equity, or planning your next investment, I’m just a call away.

Reach out today — let’s get you EOFY-ready and set up for a successful year ahead.

Why More Australians Trust Mortgage Brokers Than Ever Before

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When you start exploring a home loan, the number of options can feel overwhelming. Do you choose a Big Four bank or a smaller lender? Fixed rate or variable? What’s the right structure for you in today’s market?

With so much to weigh up, it’s no surprise that more Australians are turning to mortgage brokers for help and guidance. In fact, the mortgage broker market share has hit a record high — over 76% of borrowers now work with a broker rather than dealing directly with a bank.

Here’s why so many Aussies trust brokers to get it right:

1. Boost Your Borrowing Power

Every lender has their own rules. What one bank says “yes” to, another might decline — or lend you a lower amount. Mortgage brokers understand each lender’s policies in detail. This means if you want to maximise your borrowing power — or if you have a complex scenario, like self-employment — a broker knows exactly where to go.

2. More Choice, Better Fit

Brokers work with a wide panel of lenders, giving you access to a huge range of loans. They take the time to understand your situation and goals, then match you to the best option — not just the product of a single bank.

3. Exclusive Deals & Discounts

Certain lenders offer special deals for specific professions — like teachers, doctors, or self-employed clients. A broker can connect you with these offers and often negotiate sharper rates or terms on your behalf. If you go direct, you’d be doing all the negotiating yourself.

4. A Legal Duty to Put You First

Brokers are bound by the Best Interests Duty — they must recommend what’s genuinely best for you, not the lender. That means you get options tailored to your circumstances, not a one-size-fits-all deal.

5. Less Stress, Less Paperwork

Applying for a loan can be time-consuming and confusing. A broker handles the paperwork, guides you through the process, and keeps you informed — from pre-approval to settlement and beyond. You always have an expert in your corner.

Let’s Make Your Next Move Easy

Buying a home is likely the biggest financial commitment you’ll ever make — you want to get it right.

At Strategic Investor Group, we’re here to help you understand your options, unlock your borrowing power and save time and money along the way.

Ready to see what’s possible?
 Reach out today for a chat about your borrowing capacity, pre-approval or your current home loan.

Smart End-of-Financial-Year Tax Tips for Property Investors

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Tax time might not be your favourite season — but for property investors, it’s a valuable opportunity to tidy up your finances, maximise your deductions, and plan ahead for the new financial year.

Below are some practical tax tips to help you make the most of your investment property this EOFY.

1. Understand What Rental Expenses You Can Claim

As a rule of thumb, if you’ve spent money to earn rental income (and kept good records), you may be able to claim it as a tax deduction.

The ATO breaks down rental property expenses into three categories:

  • Immediate deductions: Expenses claimable in the same income year — like loan interest, council rates, pest control, repairs and maintenance, and low-cost assets under $300.

  • Deductions over time: Capital works, borrowing expenses, and depreciation of assets spread over several years.

  • Non-claimable costs: Personal expenses (if you live in the property) or certain second-hand assets bought after 9 May 2017.

2. Split Expenses Correctly for Part-Time Rentals

If your property is listed on short-term rental platforms like Airbnb, or only partly rented out (like a spare room), you’ll need to divide your expenses accurately between private and income-producing use.

Incorrectly apportioning these can mean lost deductions or over-claiming — which could lead to issues at tax time. Refer to the ATO’s rental guide for clear instructions, or chat with your tax advisor.

3. Claim Long-Term Deductions Properly

Not all expenses can be claimed upfront — but don’t overlook them:

  • Borrowing costs: Such as loan setup fees can be spread over five years or the life of the loan (whichever is shorter).

  • Capital improvements: Major renovations, structural changes, or upgrades may qualify for capital works deductions claimed over several years.

  • Depreciating assets: Items like carpet, blinds, or appliances lose value over time. A qualified quantity surveyor can create a depreciation schedule to help you claim these accurately.

4. Complete Repairs Before 30 June

Planning repairs? It pays to act before the EOFY deadline. Eligible repairs completed before 30 June — like fixing a leaking tap, replacing a faulty heater, or doing pest control — can be claimed this financial year.

5. Include Loan and Insurance Costs

Most finance costs linked to your investment property are deductible. This can include:

  • Interest paid on your investment loan

  • Ongoing account-keeping or loan service fees

  • Insurance premiums (building, landlord, contents, rental loss)

Be sure to keep all related records to support your claims.

✅ EOFY Checklist for Property Investors

  • Review which expenses are claimable immediately or spread over time

  • Apportion costs for part-time or partial-use properties

  • Finalise repairs and maintenance before 30 June

  • Include all eligible borrowing costs and insurance premiums

  • Keep clear, up-to-date records and receipts

Ready to Get the Most from Your Investment This Financial Year?

The information above is general — always speak to your tax professional for advice tailored to you.

If you’d like help reviewing your current loan, planning for your next purchase, or refinancing to maximise your cash flow, our team is here to help.

Contact us today to make this EOFY your most productive yet.

Is Your Retirement Plan on Track? Here’s How to Prepare for the Next Chapter

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Retirement should be about freedom — whether that means teeing off on the golf course, travelling Australia in a motorhome, tending your veggie garden, or soaking up precious moments with the grandkids.

To truly enjoy it, you need a clear plan. Here’s what to consider to make sure your retirement years are everything you want them to be.

1. When Do You Want to Retire?

Your ideal retirement age depends on a few key factors:

  • How much you’ll need to maintain your lifestyle

  • What government benefits you’ll be eligible for

  • Whether you’d like to retire debt-free

  • Your health and personal circumstances

A practical first step is setting a realistic retirement budget. Include day-to-day costs plus the fun things — travel, dining out, hobbies, gifts for family — then map out how much you’ll need each year.

2. Make the Most of Your Super

In Australia, you can generally access your superannuation from age 55. Will your super be enough to cover your retirement plans? If not, now’s the time to take action:

  • Salary Sacrifice: Contribute extra from your pre-tax income. These contributions are taxed at just 15% — often lower than your marginal rate.

  • Personal Contributions: You can also top up your super with after-tax income and may claim a tax deduction for doing so.

  • Know Your Caps: Be mindful of annual contribution limits to avoid unnecessary tax. Check the latest ATO caps to make smart contributions.

Super balances can fluctuate with market changes — if you’re concerned about how volatility could affect your retirement savings, it’s wise to speak with a financial planner about strategies to stay on track.

3. Explore Government Benefits

Depending on your income and assets, you may be eligible for government support in retirement, including:

  • The Age Pension

  • Concession cards and discounts

  • Low-cost banking options

  • Healthcare benefits and tax offsets

Head to the Moneysmart website for a breakdown of what you may be entitled to.

4. Clear Debts Before You Clock Off

Studies show nearly 1 in 3 Australians approaching retirement still carry mortgage debt — and many retirees continue paying off loans well into retirement.

Ideally, aim to enter retirement debt-free. This might mean:

  • Paying down credit cards, car loans, and personal loans while you’re still earning

  • Reviewing your mortgage to see if refinancing could save you money

  • Considering whether downsizing could free up equity and reduce your repayments

Chat to us if you’d like help assessing your options.

5. What If You Need Finance?

Sometimes, extra funds are needed to shape the retirement you want — maybe to renovate your home for accessibility, or to start fresh after a life change.

Traditional lenders can be more cautious once you approach your 60s, but you may still have options. For example, a reverse mortgage lets you access equity in your home to fund living costs or renovations. It’s not for everyone, so always seek financial advice first.

Ready to Plan a Stress-Free Retirement?

Retirement should be your reward for decades of hard work — not a source of financial worry. If you’d like to review your current home loan, refinance for better rates, or learn more about smart finance options for your retirement, we’re here to help.

📞 Contact us today — and take control of your future with confidence.

Navigating the risks of rate rises

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2023 has been an historic year for the Reserve Bank of Australia’s (RBA) in raising the cash rate to an 11-year high in an effort to battle inflation.

The cash rate was only 0.1 per cent in early May last year, and it has been lifted rapidly since then — 12 times across 16 months — in the steepest increase in the RBA’s history, to where it’s now sitting at 4.1 per cent.

As the RBA continues to try and curb consumer spending, there are a number of risks that borrowers could face after this series of cash rate rises.

Read on to find out what these are and what you can do to mitigate the risk.

Getting trapped in a ‘mortgage prison’

‘Mortgage prison’ is when you lack the equity or can’t meet the serviceability requirements to refinance your home loan.

Basically, you become stuck in your current mortgage, even if it’s no longer suitable for you.

You can find yourself in mortgage prison if the value of your property has fallen and interest rates have risen.

Venturing into negative equity

A rising cash rate can cause downward pressure on property prices, which can leave some properties in negative equity territory.

Negative equity is when the market value of your property falls below your outstanding home loan balance. That’s right – you owe the bank more than what your property is worth.

Say your property is worth $800,000 and you owe the bank $720,000. If your property’s value dips to $700,000, you’ve landed in negative equity.

Homeowners who took out large loans at low-interest rates with minimal deposits may be at greater risk of venturing into negative equity, particularly if their interest rates have increased and their property’s value has fallen.

Navigating fixed-rate loans

During the COVID-19 pandemic, fixed-rate borrowing increased significantly as borrowers made the most of low-interest rates. Mortgage holders fixed for longer periods, and banks offered fixed rates below variable rates.

Now, many of those fixed terms are expiring. According to the RBA, in 2023, 880,000 fixed rates will expire, while in 2024, 450,000 loans will reach the end of their fixed term.

These borrowers are facing substantially higher interest rates. This begs the question – do you fix at a higher rate or let the loan revert to variable?

Economists are largely split as to whether the cash rate will remain where it is or whether we could see a cut in the next 12 months – which may not be the best news for those who have already re-fixed their home loans.

How to mitigate the risk of a changing cash rate

Build up your equity

There are a few options to explore here:

  • Increase your repayments: If the budget allows for it, increasing your repayment even slightly could help you build up your equity faster.
  • Make repayments more frequently: Paying weekly or fortnightly could help you pay off more of your mortgage each year and build equity.
  • Make extra repayments: Build your equity by throwing a lump sum on the home loan or making a regular extra repayment to get ahead.
  • Renovate: Give your property a facelift and help boost its value, and in turn, your equity.

Consider refinancing

By refinancing, you could secure a more competitive interest rate or a home loan with interest-saving features that may help you pay off the mortgage sooner.

If you’re in a mortgage prison or negative equity territory, it may be difficult to refinance. However, it’s important to speak to us so that we can explore your options and make a plan.

Need help?

The sooner you reach out, the broader the range of choices you’ll have. So get in touch and we’ll take a look at your specific circumstances.

Negotiating a spring bargain

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Spring typically sees an uptick in property sales and this trend looks set to continue in 2023.

In the first week of spring, more than 2,400 properties were scheduled to go under the hammer – up 13 per cent compared to the first week of spring in 2022.

Coupled with property prices rising in recent months, it’s important to understand how to negotiate like a pro if you’re on the hunt for a bargain this spring. Read on for our top tips.

Tip 1: Comprehensive research

A deep understanding of the local property market can be a significant advantage. You’ll be in a better position to make an offer or bid with confidence. We provide a range of detailed reports that can offer insights. Whether you’re keen on specific suburb data or an estimated valuation of a particular property, we’re here to assist.

Hint: CoreLogic’s weekly Auction Market Previews are a valuable tool. They provide timely updates, ensuring you’re always informed about market shifts.

Tip 2: Secure your finances

When the right property comes along, being financially prepared can make all the difference. Discuss pre-approval with us now. Having pre-approval gives you confidence during price negotiations with vendors. It may also give you an edge over other buyers without pre-approved finance.

Tip 3: Understand the seller’s motivation

Gaining insights into the seller’s reasons for listing can give you an upper hand during negotiations. What settlement terms and deposits will be most attractive to them?

Are they relocating for work? Might they be open to adjusting the price for a more streamlined settlement process? Sometimes, offering a slightly larger deposit can make your proposal more appealing. Engage with the real estate agent to gather such insights.

Tip 4: Prioritise inspections

Never underestimate the value of thorough building and pest inspections. They can reveal potential issues with the property, which can be crucial during price discussions. If there are significant concerns, you may be able to use the findings from the inspection to negotiate a lower sale price.

Let’s Talk

If you’re in the market for a property purchase, reach out to us to organise your finance pre-approval and set yourself up for a bargain this spring.

7 tips to pay off your home loan sooner

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Managing a mortgage can be challenging, especially when faced with growing expenses. However, with a clear plan, you can make significant progress towards paying off your home loan sooner. Read on for our 7 practical tips to help boost your savings.

1. Implement and monitor a budget:

Use budgeting tools like Mint, YNAB, or PocketGuard to make it easy to categorise your spending and quickly review your finances. Regular checks can help ensure you’re adhering to your budget and savings goals.

2. Develop a sustainable plan to cut costs:

Rather than making extreme changes to your lifestyle and spending habits, focus on manageable adjustments to your spending. Consider cancelling those streaming subscriptions you’re not using, learn how to cook your favourite meals at home, or opt for a second-hand or DIY option rather than buying brand new.

3. Use automatic transfers:

Set up automatic transfers for your savings and additional mortgage repayments. This ensures you move your money to where it needs to go before you have a lapse in willpower and spend it. An offset account could also help you to reduce the cost of borrowing by more than you would earn in interest by leaving your savings in the bank. But it could also end up costing you more and limit your access to cash when you need it.

4. Review your loan every couple of years:

How long has it been since you looked at the terms of your mortgage? If your circumstances have changed and you suspect you may struggle to make future repayments, we can assist with a comprehensive loan review. We may be able to secure you a payment structure that makes your repayments more manageable and frees up cash flow.

5. Consider additional income sources:

Realistically, there is only so much you can save. Another way to boost your savings and make extra repayments is to establish an additional income stream. Think about starting a side job, renting out assets, or selling some of the unused items sitting around the house.

6. Opt for lump sum payments:

If you receive a tax return or bonus, think about making an additional mortgage payment. The long-term benefits of additional payments could reduce the life of the loan significantly.

On a typical 25-year principal and interest mortgage, most of your payments during the first five to eight years go towards paying off interest. So anything extra you put in during that time will reduce the amount of interest you pay and shorten the life of your loan.

Make sure to ask your lender if there’s a fee for making extra repayments.

7. Change your payment frequency:

Switching your mortgage repayments from monthly to weekly can offer benefits in the long run. Since interest accumulates daily, this adjustment might lead to savings on your overall home loan.

Need assistance with paying off your home loans sooner?

If you’re looking to kickstart your savings plan and boost your mortgage repayments, reach out to us. We’re here to provide guidance and support.

Smart Investing for the Budget-Savvy

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Is a small budget holding you back from property investment? Think again!

You might be surprised to learn that you don’t need a hefty bank balance to dive into the property market. Let’s explore how you could make this dream a reality.

1. Unlock Your Home’s Potential Through Equity

What’s Equity? It’s the difference between your property’s market value and what you owe the bank. For instance, if your home is worth $800,000 and you owe $500,000, you have $300,000 in equity.

How Can It Help? If the value of your home has appreciated or you’ve made significant progress on your mortgage payments, you could be sitting on a hidden treasure. By refinancing, you can tap into this equity, providing you with the means to invest without depleting your savings.

2. Think Beyond the City

Why Regional? If city investments are stretching your budget, consider looking into regional areas. Many of these zones have recently surpassed major cities in performance, especially when it comes to vacancies, rental rates, and property values.

Hotspots to Consider in 2023: Refer to the latest “Top 10 Affordable Regional Areas 2023” report for inspiration. This comprehensive study, based on affordability, property trends, investment considerations, project development, and unemployment rates, highlighted the following standout areas:

  • Queensland: The Whitsunday Region, Mackay Regional Council, The Charters Towers Region.
  • New South Wales: Federation Council, Dubbo Regional Council, The City of Lithgow.
  • Victoria: City of Greater Bendigo, City of Greater Shepparton, City of Ballarat.

 

  • Tasmania: Central Coast Council.

3. Two Heads Are Better Than One

Joint Ventures: Consider teaming up with someone. It could be a friend, family member, or another investor. Pooling resources can make property investment more accessible.

Remember: This is a big decision. Always get legal advice to ensure everyone’s on the same page.

4. The Off-the-Plan Route

How It Works: You sign a contract, pay a deposit (often just 10%), and settle the balance once the property’s built. This gives you time to get your finances in order.

Pros: Lock in today’s price, even if property values soar during construction.

Cons: There are risks, like potential drops in property value. Always research thoroughly.

Ready to Dive In?

Exploring finance options is a crucial step. Reach out to us! We’re here to guide you through the maze and help you align with your investment objectives.